Rachel Reeves’ choice of language to describe the Tory economic narrative and the timing of her intervention is strange.
‘Gaslighting’ is a trendy word with obscure origins and meaning. It has little resonance for ordinary citizens.
Reeves wants it to suggest that the Tories are telling porkies (a word people might understand) when they refer to the UK economy turning the corner.
Markets disagree with Reeves. The FTSE 100 hit another record in latest trading and is catching up with Nasdaq activity this year.
Share prices may not be the best barometer of economic performance but global investors would not pile money into UK stocks unless they believed conditions are improving.
Out of ideas: Labour’s Shadow Chancellor of the Exchequer Rachel Reeves and Labour leader Sir Keir Starmer
British interest rates are predicted to come down before those on the other side of the Atlantic.
We should know more about that tomorrow when minutes of the latest Bank of England interest rate setting committee are released.
The cost of fixed-rate mortgages is falling with Barclays among those offering new competitive rates.
As far as the real economy of output and jobs is concerned, data from the Purchasing Managers’ Index (PMI) shows more evidence ‘that economic recovery is becoming more established’ according to EY Item Club which uses a similar model to the Treasury.
The construction sector PMI rose sharply from 50.2 in March to 53 in April. Last week’s services sector data was healthy.
The Organisation for Economic Co-operation and Development (OECD) notes that in the final quarter of last year, when the economy technically shrunk, real household income rose by 0.5 per cent which should help bolster consumer spending.
The current EY forecast points to a 0.4 per cent rise in output in the first quarter of the year when the official numbers emerge later this week.
Labour clearly thinks it is on to a winner with its narrative about gaslighting and Tories crashing the economy.
This worked on the doorsteps during the municipal and regional mayoral elections, but with each passing day it departs from reality.
It may be too late to change the political direction. However, the bigger question for Reeves and Keir Starmer is ‘where’s the beef’?
Reeves cites planning reform and the creation of a British wealth fund to invest in great British firms as supporting growth. Anything which puts rocket fuel under the UK’s archaic planning rules will be welcome.
The difficulty in overcoming ‘nimbyism’ and galvanising weak local authorities should not be underestimated. Where new capital is to come from, to support wealth funds, needs more explanation.
What is missing from all of this is what George Bush senior once described as the ‘vision thing’.
Behind the scenes Labour advisers are thought to be working on a new industrial strategy or mission to replace what Boris Johnson abandoned.
Someone, somewhere needs to speak up for UK science, AI, software, gaming, pharma research and all the other stuff that the UK is so good at.
Former Labour leaders Harold Wilson and Tony Blair had the vision thing.
So far Starmer and Reeves spend most of their time looking backwards on the economy and rowing backwards on pledges such as the green new deal and the misguided new deal for working people. It is hardly a strategy to set pulses racing.
Power play
There is good stuff going on. Japan’s Softbank is not flavour of the last decade after it dragged semi-conductor pioneer Arm off to Nasdaq.
It has now reappeared in leading a $1billion (£800million) funding for UK self-driving car start-up Wayve.
This is being billed by Founders Forum boss Brent Hoberman as Europe’s largest ever artificial intelligence (AI) venture.
Britain has a track record for tech start-ups, but has proved useless in turning the companies into national champions.
The UK needs to follow the example of the Americans and robustly deploy our own National Security and Investment Act. Such great powers, so little used.